divine, inc., (Nasdaq: DVIN), a premier integrated solution provider focused on the extended enterprise, and Dallas-based Data Return Corporation (Nasdaq: DRTN), which specializes in providing high-availability managed hosting services for companies with Microsoft-based technology applications, today announced that divine has signed a definitive agreement to acquire Data Return. Under the terms of the stock-for-stock merger agreement, unanimously approved by the Board of Directors of each company, divine will acquire all of the outstanding shares of Data Return common stock for a fixed exchange rate where each outstanding share of Data Return will be converted into the right to receive 1.9876 shares of divine's Class A Common Stock based on the current number of out standing Data Return shares. The deal will be subject to customary regulatory approvals as well as approval of two-thirds of Data Return's shareholders. Shareholders holding 35 percent of Data Return's outstanding shares have already agreed to vote in favor of the transaction.

"Data Return's proven experience, world-class technology and leading-edge capabilities in managed hosting are a compelling fit with divine's mission to be the preferred fully managed services provider for complex, mission–critical extended enterprise applications," Dennedy said. "Combined with Data Return, divine Managed Services achieves a critical mass of revenue, a clear path to profitability entering the second quarter of 2002, a solid distribution channel into enterprise clients, and automated tools to scale the business.

These are the key ingredients for a sustainable competitive advantage that will allow us to dominate the enterprise managed services market. With $60 million of revenue already under contract, we expect that divine Managed Services will emerge as one of the industry's largest players with a revenue run rate of more than $100 million in 2002."

By combining Data Return's expertise in advanced hosting services for the Microsoft platform with divine's professional services, software services and existing portfolio of managed services for Solaris, HP-UX, AIX, Oracle, and BEA Systems, the combined company will deliver the hosting and managed services offerings required to address all of the needs of the Global 5000. divine Managed Services will be led by Dennedy and Vanderbeck and is expected to significantly expand its client base, product set, and geographic reach.

"Since 1997, Data Return has been providing a higher standard of managed hosting for our customers. We share a common vision of reliable, scalable, secure delivery of managed services," Vanderbeck said. "By combining Data Return's depth in highly automated operations with divine Managed Service's breadth of platforms we will be able to jointly deliver the highest degree of quality and consistency across the largest number of platforms from a single
company. divine's internal distribution channel of 300 enterprise sales professionals, 2,000 professional services personnel and a $400 million software services business will give us the enterprise reach required to capture the leading position in the market."

In connection with the merger agreement, divine and Data Return entered into a secured credit facility providing Data Return up to $12.8 million in interim financing.